As many media houses reported, the recent spike in Bitcoin value has been caused by the failure of Greece’s financial system. It has been theorized that that the Greeks are treating Bitcoin as their last resort to escape a weak economical infrastructure; that they are willing to invest in the digital currency sector to keep their assets strong until the current economic meltdown reaches conclusion.
A most of these theories are born out of coincidences. First: Bitcoin value had surged around 10% over the last month, 3.5% over the last week; and 5% in over the last 24 hours (at press time). On the other hand, Greek Parliament has announced a referendum to be held next week — on July 5th 2015 — and has imposed capital control on the entire country, in the wake of which banks would remain closed until further notice.
The dots are simple to connect. Greeks, who are forced to have their hard-earned money locked inside a government building, have nowhere to go in these tough times. They are probably surviving on the cash they were able to withdraw before the banks got shutdown. Bitcoin, for its decentralized and privacy-enteric features, seems like their natural companion in this time of need.
But are they even aware about Bitcoin?
The CNN Money reports that Greeks are indeed rushing to get their hold on Bitcoin, that they are turning to online trading platforms to get their first taste of the digital currency investments. The report further refers an increase in number of Greek visitors on multiple Bitcoin trading websites. They include Shanghai-based LakeBTC which has claimed a 40% increase in visitor traffic from Greece, as well as a German marketplace bitcoin.de which claims that the Bitcoin trades have surged 79% from the same region.
The studies however don’t support the aforesaid claims, especially when it comes to discussing the bigger picture. According to Bitcoin Charts, Euro purchases of Bitcoin marks only 6% of the entire transaction volume. On the other hand, LocalBitcoins.com report suggests that the recent volume spike has came from Russia, India, Sweden and South Africa.
It has been further reported that Greece alone cannot boost the Bitcoin economy, for it is a very small economy in comparison to the US, India, etc. There is not a single deterministic equation that could explain a direct relation between Bitcoin price and Greece’s economy.
Speculators/Day Traders Cashing on Grexit?
Indeed, Bitcoin is a speculative market. Greed has been driving it since the very start. The aforementioned spike therefore could be nothing but a psychologically-induced pump, involuntarily backed by a perfectly timed Greece’s economic meltdown. The currently volatility is great for day traders, undoubtedly; but we are still expecting a slowdown in upwards momentum once the hype reaches its conclusion.
We recommend you to read “Cyprus 2013 crisis” to understand it further.
